Gold Price Forecast: XAU/USD flirts with two-week top below $1,800 ahead of US PCE Inflation

• Gold price remains sidelined after refreshing two-week high.
• Cautious mood ahead of key data, mixed concerns surrounding China and firmer US inflation expectations probe XAU/USD buyers.
• Strong US data could test dovish bias over the Fed’s next move and tease Gold sellers.

Gold price (XAU/USD) seesaws near a two-week high surrounding $1,780 as buyers await the key US inflation signals during early Thursday. In doing so, the bullion price edges higher around the multi-day high, marked a few minutes before, during the three-day uptrend.

It’s worth noting that the dovish comments from the Federal Reserve (Fed) officials, including Chairman Jerome Powell, joined softer US employment-linked data to propel the Gold price the previous day. On the same line was the easing in the virus-led activity controls in China as the dragon nation reports the third day of declining daily infections after refreshing the record top.

However, a recent increase in the US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, should have also probed the metal’s latest upside. Additionally challenging the XAU/USD bulls could be the downbeat comments from US National Security Adviser Jake Sullivan suggesting fresh challenges for the Sino-American optimists. The diplomat said, “The US sees China as a growing strategic threat.”

While portraying the market’s mood, S&P 500 Futures print mild gains and the equities in the Asia-Pacific region grind higher by tracking Wall Street gains. Further, the US 10-year Treasury bond yields remain pressured around 3.62% after refreshing a two-month low the previous day.

Recently, US Treasury Secretary Janet Yellen said that the US economy will likely be able to achieve a so-called "soft landing," in which inflation slows without tipping the economy into a sharp recession. The same keeps the Gold buyers hopeful as they await the Fed’s preferred inflation gauge, namely US Core Personal Consumption Expenditure (PCE) Price Index for October, expected 5.0% YoY versus 5.1% prior.

Additionally important will be the monthly prints of the US ISM Manufacturing PMI for November, expected 49.8 versus 50.2 prior, as well as headlines surrounding China and comments from the second-order Fed policymakers.

Technical analysis

Gold price grinds higher past the 200-day Exponential Moving Average (EMA) as bulls take a breather around the highest levels in a fortnight.

In doing so, the yellow metal fades upside momentum, as portrayed by the sluggish MACD signals, below a four-month-old resistance line, near $1,783. It’s worth noting that the nearly overbought RSI (14) also challenges the XAU/USD’s further upside near the key hurdle.

Even if the Gold buyers manage to cross the $1,783 hurdle, the monthly high near $1,787 and August month’s peak near $1,807 could challenge the bullion’s additional run-up.

Alternatively, the 200-day EMA, around $1,759 by the press time, restricts the immediate downside of the bullion, a break of which highlights an upward-sloping support line from November 08, near $1,751 at the latest.

It’s worth noting that the resistance-turned-support line from September 12, close to $1,718, appears as the last defense of the Gold buyers.

Gold price: Daily chart

Trend: Limited upside expected